Huon Le v. Krepps (In re Krepps)
Huon Le v. Krepps (In re Krepps)
Opinion of the Court
OPINION AND ORDER
Before the Court is the Motion for Summary Judgment filed by Plaintiff Huon Le, Chapter 13 Trustee (“Trustee”), seeking summary judgment pursuant to 11 U.S.C. § 548(a)(1)(A) and (B)(i)-(ii)(I) that the transfer from Richard M. Krepps (“RMK”) to his son, Richard Stephen Krepps (“RSK”)
UNDISPUTED FACTS
RMK filed a chapter 13 bankruptcy petition on September 25, 2010. On Schedule
The Trustee filed this adversary proceeding against RMK and RSK seeking to avoid RMK’s transfer as a fraudulent transfer pursuant to 11 U.S.C. § 548. The Trustee also seeks to set aside the transfer and, alternatively seeks turnover of the value of the transfer from RMK pursuant to 11 U.S.C. § 550. Dkt. No. 1. RMK timely answered the complaint. Dkt. No. 9. He also responded to the Trustee’s interrogatories, but he has failed to file timely responses to either the Trustee’s Request for Production or the Request for Admission. Dkt. Nos. 20, 22, and 29. Trustee’s Motion for Summary Judgment requests that the Request for Admission be deemed admitted for RMK’s failure to timely respond. Dkt. Nos. 30 and 31. After proper notice, RMK has failed to respond to the Trustee’s Motion for Summary Judgment.
CONCLUSIONS OF LAW
Summary Judgment Standard.
Summary judgment is appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c);
[A] party seeking summary judgment always bears the initial responsibility of informing the ... court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.
Celotex, 477 U.S. at 323, 106 S.Ct. 2548 (internal quotations omitted). “In determining whether the movant has met its burden, the reviewing court must examine the evidence in a light most favorable to the opponent of the motion. All reasonable doubts and inferences should be resolved in favor of the opponent.” Amey, Inc. v. Gulf Abstract & Title, Inc., 758 F.2d 1486, 1502 (11th Cir. 1985) (citations omitted), cert. denied, 475 U.S. 1107, 106 S.Ct. 1513, 89 L.Ed.2d 912 (1986).
Pursuant to Rule 56(c), summary judgment should be granted only if “there is no issue as to any material fact and the mov
Federal Rule of Civil Procedure 36.
Pursuant to Federal Rule of Civil Procedure 36,
In this case, RMK answered the Trustee’s interrogatories, but failed to timely answer the Trustee’s Request for Admission.
With these admissions, the Trustee argues the transfer was a fraudulent transfer. Pursuant to 11 U.S.C. § 548(a):
(a)(l)The trustee may avoid any transfer ... that was made ... on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily—
(A) made such a transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the debtor was or became ... indebted; or
(B)(i) received less than a reasonably equivalent value in exchange for such transfer or obligation; and
(ii)(I) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation;
11 U.S.C. § 548(a)(1).
Given the admissions, I find the transfer from RMK to RSK was a fraudulent transfer under § 548(a)(1)(A). The transfer occurred eleven (11) days before RMK’s bankruptcy petition was filed, well within the two-year period. RMK has admitted that he made the transfer with the actual intent to defraud, hinder or delay his creditors. Intent is a question of fact that may be admitted. See In re Wines, 997 F.2d 852, 856 (11th Cir. 1993) (“[W]hether the debtor had the requisite wrongful intent is a question of fact.”); see also CIT Small Bus. Lending Corp. v. Diaz (In re Diaz), 402 B.R. 407, 421 (Bankr.M.D.Fla. 2008) quoting Equitable Bank v. Miller (In re Miller), 39 F.3d 301, 305 (11th Cir. 1994). Therefore, the transfer is avoided pursuant to § 548(a)(1)(A).
The transfer also is a fraudulent transfer pursuant to § 548(a)(1)(B)®-(ii)(I), as RMK transferred property within
Pursuant to 11 U.S.C. § 550.
The final issue is whether the Trustee may recover from RMK the Property transferred or value of such property under 11 U.S.C. § 550. If a transfer is avoided under section 548 or one of several other provisions of the Bankruptcy Code, section 550(a)(1) allows the recovery of the property transferred or its value from the “initial transferee of such a transfer or the entity for whose benefit such transfer was made.” 11 U.S.C. § 550(a)(1). The Trustee asserts “[t]he trustee may recover the transferred property or the value of the transferred property from either the transferor or the initial transferee.” Dkt. No. 31, Memorandum in Support of Motion for Summary Judgment Against Richard M. Krepps, p. 9 (emphasis added). Section 550 expressly allows recovery from the initial transferee, not the initial trans-feror. The Trustee has not asserted RMK is an “entity for whose benefit such a transfer is made.” In fact, RMK denies receiving any benefit from the transfer. Dkt. No. 9, Answer to Complaint. The Requests for Admission did not include an admission that RMK benefited from the transfer. Dckt. No. 22, Plaintiffs Requests for Admission. Therefore, at this point, I find the Trustee has failed to establish as a matter of law that she is entitled to recover from RMK the property or value of the property pursuant to 11 U.S.C. § 550. See In re Coggin, 30 F.3d 1443, 1453-54 (11th Cir. 1994), abrogated on other grounds, Kontrick v. Ryan, 540 U.S. 443, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (“By applying its plain language and apparent purpose, and by consulting our bankruptcy compass, however, we hold that section 550(a)(1) does not allow recov
For these reasons, it is therefore ORDERED that Trustee’s Motion for Summary Judgment against Richard M. Krepps is GRANTED IN PART with the finding that the transfer of the Property was a fraudulent transfer pursuant to 11 U.S.C. § 548(a)(1)(A), and § 548(a)(l)(B)(i)-(ii)(I), and DENIED IN PART with the Trustee’s request for relief pursuant to 11 U.S.C. § 550 as to RMK, as the initial transferor being DENIED.
. RSK also is a named defendant in this adversary proceeding, but is not subject to the Trustee’s motion for summary judgment.
. J.P. Morgan Chase Bank is the mortgage lienholder by security deed.
. Pursuant to Federal Rule of Bankruptcy Procedure 7056, Rule 56 of the Federal Rules of Civil Procedure is applicable in bankruptcy adversary proceedings.
. Federal Rule of Civil Procedure 36 is made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7036 and states in pertinent part:
(a) Scope and Procedure.
(1) Scope. A party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1) relating to:
(A) facts, the application of law to fact, or opinions about either; and
(B) the genuineness of any described documents.
(3) Time to Respond; Effect of Not Responding. A matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney. A shorter or longer time for responding may be stipulated to under Rule 29 or be ordered by the court.
. "Pro se pleadings are held to a less stringent standard than pleadings drafted by attorneys and will, therefore, be liberally construed.” Tannenbaum v. United States, 148 F.3d 1262, 1263 (11th Cir. 1998). However, a party’s pro se status does not excuse his noncompliance with discovery orders. Reed v. Fulton Cnty. Gov’t, 170 Fed.Appx. 674, 676 (11th Cir. 2006) citing Morton v. Harris, 628 F.2d 438, 440 (5th Cir. 1980); see also Welch v. Comcar Indus., 139 Fed.Appx. 138, 139 (11th Cir. 2005).
. The Court notes the Trustee did not seek summary judgment pursuant to 11 U.S.C. § 548(a)(l)(B)(i)-(ii)(IV) for a transfer to an insider and therefore the Court does not address this section.
Reference
- Full Case Name
- In re Richard Marion KREPPS, Debtor. Huon Le, Chapter 13 Trustee v. Richard M. Krepps, and Richard Stephen Krepps
- Cited By
- 2 cases
- Status
- Published